Commentary

I3.722 Computation of the chargeable amount (chattels)

IHT, trusts and estates

I3.722 Computation of the chargeable amount (chattels)

I3.722 Computation of the chargeable amount (chattels)

Where a pre-owned assets charge arises in respect of a chattel, the 'chargeable amount' is the 'appropriate amount' less the amount of certain allowable payments made by the taxpayer in respect of their possession or use of the chattel1.

The 'taxable period' is the year of assessment, or part of a year of assessment, during which the disposal condition or the contribution condition is met2. In the case of non-continuous possession or use, it would appear to be possible to have more than one taxable period within a year of assessment.

The 'valuation date' is prescribed by regulations3 and is addressed in I3.743.

Appropriate amount

In contrast to the pre-owned assets charge on land which is based on rental value, the charge on a chattel is based on the notional amount of interest that would be payable for the taxable period (apportioning as appropriate where this is a period of less than a year) if interest were payable at the prescribed rate on an amount equal to the value of the chattel 'at the valuation date'. The 'appropriate amount' for any taxable period is determined as such part of that notional interest as is attributed, at the valuation date, to that part of the value of the chattel that represents the taxpayer's disposal or contribution4. Where the taxpayer has retained any interest in the chattel, this will automatically exclude the notional interest value attributable to his retained interest.

The 'prescribed rate' is set by regulations and is

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